SE Asia Deals Barometer Report: Startup fundraising stays below $1b mark in March despite 90% MoM jump

Fundraising by Southeast Asian startups touched $781 million across 76 deals in March, registering a growth of about 90% over February, show proprietary data compiled by DealStreetAsia.

In February, there were 55 funding deals that raised $409 million, with just one deal exceeding $100 million. In March, too, megadeals remained scarce, with only two deals surpassing the nine-figure-dollar mark.

Aside from VC and PE transactions, the deal count also includes corporate rounds, debt financing, equity crowdfunding, and a bridge round. There were at least seven deals in the month where the funding amount was not disclosed.

While last month’s funding total was the highest so far this year, it was still around 32% below the $1.14 billion that startups in the region raised in March 2022 from at least 123 transactions. It was also the third month on the trot that funding stayed below $1 billion.

For the entire 2022, total funding in the venture capital space had dropped 32% to $15.8 billion from 2021’s record highs. Annual deal volume, however, defied the trend, closing 9.6% higher at 1,062, signalling a shift away from big-ticket deals.

The preference for smaller deals still continues. Fintech company Kredivo and healthcare firm Foundation Healthcare, both headquartered in Singapore, were the only startups that sealed deals worth over $100 million in March.

Kredivo raised $270 million in its Series D funding round anchored by Mizuho Bank while Foundation Healthcare secured $110.8 million in private equity investment from Temasek-backed investor SeaTown Holdings.

The two megadeals of March 2023

No startup in Southeast Asia has made it to the unicorn club this year so far. In 2022, eight privately-held startups in the region had earned the much sought-after unicorn tag. In 2021, there were a record 23 startups in the region that crossed the $1 billion valuation.

Singapore startups continue to lead

Startups in Singapore accounted for about 78% of the total funds raised in March after they amassed a total of $614 million in funding from at least 46 transactions, DealStreetAsia’s data showed.

The deal value was up by about 125% month-on-month thanks to the two mega deals that raised a combined $380 million. In February, Singapore startups had raised $273 million from 32 deals.

Vietnamese startups took the second spot in terms of funding value, after raising $52 million from just three transactions. Deal value in Vietnam was lifted by fintech firm F88’s $50 million Series C round backed by Mekong Capital.

Thai startups stood third in terms of funding value at $45.8 million from four deals. Roojai, an insurtech startup, led the pack after raising $42 million in a Series B round anchored by HDI International, a subsidiary of the German insurance company Talanx Group.

Filipino startups secured $33.5 million even with just six deals registered in the month.

Advance, a Philippines-based fintech startup that operates a salary-on-demand platform, raised $16 million in a pre-Series A funding round, making it the largest funding deal in the country in March. The round was co-anchored by Vietnam’s Do Ventures and emerging market credit provider Lendable.

In Indonesia, there were 13 transactions that raised at least $31 million, with the value of six deals being undisclosed. Indonesia’s largest deal last month was the $10 million pre-Series A funding in e-commerce startup Broom, led by Openspace. In February, Indonesian startups had raised $61 million from seven deals, ranking second in terms of fundraising.

Malaysia, meanwhile, saw four deals that raised a total of $4.1 million in March, while Cambodia appeared on the table with one transaction that raised an undisclosed amount.

Fintech remains investors’ favourite

Startups in the fintech vertical continued to grab significant investor interest last month, with 21 deals that raised about $459 million in total funding, or about 59% of the total money raised. The bulk of the funding went to Kredivo.

Fintech’s lead in March did not come as a surprise as the sector accounted for a third of all private funding last year, up from a quarter in 2021, according to DealStreetAsia DATA VANTAGE’s SE Asia Deal Review: Q4 2022 report.

This was largely due to a lack of mega funding rounds in other areas, primarily super apps, e-commerce and logistics, in 2022. Fintech startups also accounted for 22% of the deal volume last year, down from 31% in 2021 as the easing of COVID-19 restrictions spurred investments in other verticals.

The e-commerce space had seven deals in March that raised just $72 million, while healthcare/healthtech startup secured $117 million from six transactions. Agritech startups raised $9.5 million from six deals while Software & IT companies were involved in five transactions that raised about $29 million in total.

Early-stage deals continue to hog the limelight

In terms of deal volume, early-stage deals continue to grab the limelight. There were 27 seed-stage transactions that raised about $69 million in the month. In February, there were 21 seed-stage deals.

Singapore-based stablecoin startup CNHC raised the largest seed round in March at $10 million, anchored by KuCoin Ventures, the venture arm of Seychelles-registered crypto exchange KuCoin.

The investment in CNHC was part of KuCoin Ventures’ broader strategy of investing in the Web3 infrastructure in the APAC region, according to Justin Chou, chief investment officer of KuCoin and lead at KuCoin Ventures.

Startups at pre-seed stage were involved in 10 deals that raised about $3 million while those in series A stage scooped up a total of $65.6 million in funding. The highest series A funding went to Singapore e-commerce firm Reebelo, which raised $29 million in a Cathay Innovation-led round.

The month of March also saw five pre-series A, four series C, three pre-series B, two series B, and one series D round. There were also four corporate rounds, two debt financing and private equity, one bridge funding, and one equity crowdfunding round.

Most active investor

East Ventures, an Indonesia-based, sector-agnostic venture capital firm, emerged as the most active lead investor in March, with three anchor investments — Vietnam’s e-pharmacy startup Medigo and Indonesia’s marketing tech firm Social Bread and e-commerce startup Bababos.

The Indonesian VC firm also participated in at least three other funding rounds. East Ventures earlier announced last that it plans to double down on the healthcare sector, with a special emphasis on genomics.